Review: Religare Invesco Global Equity Fund

Religare Invesco AMC has also launched its international fund under the fund of fund structure, known as Religare Invesco Global Equity Fund. This fund will be investing in the units of Invesco Global Equity Income Fund, a Luxembourg based fund. 

History - Invesco Invesco Global Equity Income Fund: The fund has been in existence since November 1989. Invesco Global Equity Income Fund was formerly named Morgan Stanley Global Value Equity Fund, and it became Invesco Global Value Equity Fund in 2010 as part of Invesco’s acquisition of Van Kampen Investments/Morgan Stanley Retail Asset Management Business. The fund was finally renamed to Invesco Global Equity Income Fund on September 30, 2011.

Even though the fund’s name has changed and so has the manager since 2011, but the mandate has not changed and focus of the fund so far has not changed.

Investment strategy: 

Religare Invesco Global Equity Fund aims to generate a rising level of income, together with long‐term capital growth, investing primarily in global equities. The investment style in the profile states: “No style bias. Investment team tries to target the best mix of individual risk/reward opportunities at any point in time.”

The Scheme may invest part of its corpus in debt and money market instruments or units of debt/income schemes or liquid funds of Religare Invesco Mutual Fund.

The fund’s investment process is bottom-up and stock selection is done on the basis of strong investment idea backed by fundamental of the stocks in the industry.

Benchmark: The fund’s benchmark is MSCI World index – Net Dividend. 

About MSCI World Index-Net Dividend: The MSCI World Index captures large and mid-cap representation across 24 Developed Markets (DM) countries. DM countries include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the UK and the US. With 1,607 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. MSCI World was launched on Feb 27, 1970. 

The drawback of this index is that it covers only the developed market. Therefore, if the rally is in emerging market and the fund has decent exposure on it then it will not be reflected in the index but the fund would show outperformance. 

Fund Manager: 

For the Indian fund, Neelesh Dhamanskar is the fund manager for the Scheme. He has approximately 8 years of experience in equity research. He is also the dedicated fund manager for making investment in foreign securities for all other schemes of Religare Invesco Mutual Fund.

Meanwhile Invesco Global Equity is being managed by Nick Mustoe. He has 29 years of experience in the industry and he is with Invesco for the last four years managing this fund. 

Facts about the Funds --

1. The NFO is closing on April 28, 2014
2. The current limit for overseas investments by the Mutual Fund is equivalent to USD 300 Million i.e. approx. Rs 1,800 crore that each fund can invest overseas.
3. This fund, Invesco Global Equity Fund, has an AUM of USD 525.23 mn (as on Feb 28, 2014), although the total portfolio under this strategy is USD 4.53 bn.

 

List of International Funds

For an Indian investor there are three other funds that have mandates to invest across geographies and are not bound by any location.

			Fund Performance
Fund	Focus	Launch	2011	2012	2013	FoF/Direct	Feeder Fund
ICICI Pru Global Stable Equity Reg	Global	Sep-2013	-	-		FoF	Nordea Global Stable Equity
Birla SL International Equity A	Global	Oct-2007	7.86	16.35	36.4	Direct
Sundaram Global Advantage	Global	Jul-2007	-2.37	19.17	9.11	FoF	Multiple funds across different AMC
Religare Invesco Global Equity Fund	Global		-	-	-	FoF	Invesco Global Equity Fund

 
 

Why Invest?

The common argument for investing in any global fund is that it helps in diversification and simultaneously the investor need not worry about which geography to invest in, rather let the professionals take care of it.

Since there is low correlation between the Indian and World equity markets, investing in a global fund can help improve the risk / return characteristic of a portfolio.

This also gives Indian investors a good chance to add stocks like Apple, Google, Volvo, etc. to their portfolio, which are not available on Indian Bourses.

View

	Performance
Fund	2011	2012	2013
Invesco Global Equity Fund	5.6	15.9	29.8

The feeder fund’s performance has been excellent in 2013. Under Nick Mustoe, Invesco Global Equity has given good performance. At this point one can take a small exposure to this fund, but for horizon should be at least of 3 years. And one should keep a close eye if the fund’s mandate in India is changed, or if Nick Mustoe, CIO, leaves the fund. Investors should not invest more than 20% of their portfolio in global funds.